Win-Win Strategy and a CSR Strategy for BASF - Essay Example

Win-Win Strategy and A CSR Strategy for BASF BASF is a global magnate in chemical production; it is headquartered in Ludwigshafen, Germany. The company is presently listed in the Frankfurt, London, and Zurich Stock Exchange. The BASF Group is made up of numerous subsidiaries that are spread all across the world in 80 countries. It presently has about 390 production sites located in all continents. Its supply chain spreads to a total of 200 countries with most of these being served by the company’s joint ventures. Despite the company’s widespread operations it is still not easily recognized as it has not had a consumer product line since the 1990s. BASF has an employee base of 112,000 employees who have helped the company post a strong revenue growth; in 2013 the company’s turnover was €74.0 billion and a profit of €7.2 billion (BASF). BASF like other companies in the chemical industry represent an important sector in every economy, in our case Germany. At the same time, the industry represents one of the greatest environmental costs and is a clear threat if no mitigating factors are enforced. The chemical industry is also interlinked with other sectors in the economy considering that only about 13 percent of the total production leaves the plant as finished products (Esty & Simmons, 2011.p.15). In regard to the environment, chemical production utilizes the environment to source for materials with much greater intensity than any other sector. At the same time, these companies use the environment as a medium for production, storage, transport, and disposal of resulting products. Almost every stage of the production process in chemical companies represents a threat to the environment. However, this should not be the case as there are ways and means to curtail these threats without affecting the company’s profitability. In studying BASF, we examine ways through which the company can sustainably fashion its production process and products to achieve eco-efficiency. Eco-efficiency in this case not only represents green processing but a means to improve the company’s financial standing. Win-win strategy In setting up a win-win strategy, BASF will have to address the major processes especially those with the highest impact on the environment. In this section, we look at the foremost changes that would help achieve eco-efficiency with greater emphasis on the manufacturing processes. The first step is to research and put up alternate means of supplying energy to the manufacturing process. At present, there are several ways through which energy for manufacturing processes can be supplied. Using solar energy and wind power can be a good alternative, even though the energy supplied may not be enough to run the entire plant the idea is to use less amount of traditional energy sources which are more pollutant (Mayer, 1998.p.277). These supplemented with increased efficiency such as gas recycling not only achieves the environmental agenda but also cuts on cost. In regard to energy conservation, it is also important to use the latest technology such as insulation which is one of the most remarkable ways on mitigating climate change in industries. The second strategy would revolve around recycling. Most of the products leaving BASF plants are unfinished products, but going with the industry estimates of 13% of finished goods the company can focus on ways through which these can be recycled. It would be beneficial for BASF to create these products in a recyclable way as this will reduce future cost of materials (Mayer, 1998.p.277). This is “double edged”, it saves the environment and at the same time it helps cut on costs for future production as the used up products can be used in creating new products. The other strategy should focus on the materials used for the production process. Though quite expensive, it is important that BASF focuses on using natural material. A host of products can now be created from natural materials. With the increasing environmental consciousness most customers are also intent on paying an extra price for chemical free products. This notwithstanding, there is continuous regulation on chemical products (Leimkühler, 2010.p.27). An example is the regulation on some classes of biocides which have been banned for their apparent effect on marine life. Considering that these are used in making low-friction paints used in ship bodies then this maybe an opportunity to use alternative, natural technology, to create these paints which would still help in sustaining revenue for the banned products. This will be a welcome change and the extra cost would be passed on to customers who also expect a higher price for non-toxic products. The last strategy is resource optimization. Resource optimization takes on different forms and a host of processes can help in reducing the amount of waste used in the production process. Resource optimization mainly addresses the use of raw materials with the basic idea being efficient use to reduce the cost and the impact on the environment (Dornfeld, 2010.p.96). This can be ensured through a number of measures enumerated below: Improving quality control to ensure optimal use of materials. Investment in product conceptualization such as product design, this helps in maximizing on the production materials. Improving the life span (durability) as well as the quality of a company’s products, this reduces on waste. Creation and implementation of waste and recycling programs in the workplace with the desire of extending this to other stakeholders such as the neighboring community, customers and suppliers. This can also be supplemented by proper location of waste and recycling containers. CSR Strategy A CSR strategy is one that seeks to safeguard the community around the company by implementing strategies that support the community’s main agendas. In regard o environmental consciousness, BASF needs to implement friendly production processes, which curtail CO2 emissions, source for natural material which pose little risk to the environment and most importantly come up with a clear dumping policy which does not negatively impact on the environment. In essence, if BASF can be able to enforce the strategies herewith described it is clear that it would have taken a major step towards sustainability. This safeguards the environment and ensures the company’s profitability, described as the tenets of eco-efficiency. Bibliography BASF. (2014.). BASF at a glance. Retrieved March 9, 2014, from BASF: http://www.basf.com/group/corporate/en/about-basf/index?mid=0 Dornfeld, D. (2010). Green Manufacturing: Fundamentals and Applications. Berlin: Springer US. Eco-Gammer. (2013). CEO2. Retrieved March 9, 2014, from Ecogammer: http://ecogamer.org/environmental-games/ceo2-climate-change-game Esty, D. C., & Simmons, P. J. (2011). The green to gold business playbook: How to implement sustainability practices for bottom-line results in every business function. Hoboken, N.J: Wiley. Leimkühler, H.-J., & Wiley InterScience (Online service). (2010). Managing CO₂ emissions in the chemical industry. Weinheim: Wiley-VCH. Mayer, M. (1998). The German Greens: Paradox between movement and party. Philadelphia: Temple Univ. Press. Read More